UK and Trump in new tariff discussions as businesses sound alarm
The UK is in discussions with the US over President Trump’s latest tariff salvo, a cabinet minister has confirmed, as businesses sound the alarm about the increased rate.
President Donald Trump raised his base global tariff rate to 15 per cent on Saturday after the US Supreme Court struck down the authority he used to inflict his ‘Liberation Day’ tariffs last year.
Writing on his Truthsocial platform, Trump slammed the “ridiculous, poorly written, and extraordinarily anti-American decision on tariffs” before unveiling his new “fully allowed, and legally tested” 15 per cent levy.
Following negotiations last year, the UK has secured a 10 per cent rate – a significant low compared to other nations – but has been caught in Trump’s renewed trade offensive.
Education secretary Bridget Phillipson said on Sunday she hoped the “preferential deal” would continue and that “discussions are ongoing”.
“This is an evolving situation. But of course, we want to get the best possible deal for British businesses,” Phillipson told Sky News.
“I understand the uncertainty it does cause for them, but they can be assured that we will always be working to make sure they get everything that they need.”
Meanwhile, Liberal Democrats leader Ed Davey yesterday pushed for the Sir Keir Starmer to sue President Trump for $100bn over tariff damages.
“It’s the only language he understands,” Davey told the Press Association.
‘For the UK… this is something of an eff you’
Speculation has mounted that the Trump administration could be on the hook for some $120bn if businesses begin to pursue refunds for the duties paid under tariffs.
The US Treasury has pocketed around $240bn in customs duties in the last year, around $180bn more than the same period in 2024.
UK businesses fears have spiked with the latest tariff escalation.
William Bain, head of trade policy at the British Chambers of Commerce, said: “We had feared the president’s plan B response could be worse for British businesses and so it is proving.”
Bain said the extra five per cent increase in tariffs – except those covered under the Economic Prosperity Deal such as steel and aluminium – would be “bad for trade, bad for US consumers and businesses and weaken global economic growth”.
“Businesses on both sides of the Atlantic need a period of clarity and certainty. Higher tariffs are not the way to achieve that.”
Paul Ashworth, chief North America economist at Capital Economics, said Trump’s change of heart to increase the levies was likely due to him not liking “the fact that a lower effective rate would generate lower custom duties too.”
Ashworth said it would place a number of America’s biggest trading partners “exactly back where they were last week”.
“For the UK that thought it had secured a more advantageous 10 per cent rate, however, this is something of an eff you.”
But he added from Trump’s perspective the UK hit was “unavoidable” due to the legal grounding used behind the levies explicitly dictating “any tariff must be applied in a non-discriminatory manner”.